Early Purchasing
Involvement (EPI) A practice involving supply management professionals
in a new product development process from its inception

Early Supplier Involvement (ESI)A practice that brings together one or more selected
suppliers with a buyer's product design team early in the
product development process

E-BusinessA means of doing business that uses electronic
technologies such as EDI, Internet, Web based supply chain
integration to the benefit of an organisation. It's also
known as E-commerce

Economic IndicatorsActivities that change relative to the economy

Economic Order Quantity - EOQA deterministic model that minimizes total acquisition
and inventory carrying cost. Popularly it is known as EOQ

Economies of ScaleThe reduction in average unit costs experienced as an
orgnisation's volume increases

Electronic CommerceUtilization of technology of the computer , including
such tools as EDI, the internet, intranets , Extranets to
do commercial transaction

Electronic Data InterchangePopularly known as EDI it's computer to computer
exchange of business information in a standard format.
Transaction documents are transmitted electronically from
purchaser's computer to the seller's computer

Electronic Fund TransferThe electronic transmission of funds from one party,
usually the Purchaser to other party, usually the
Supplier. The transfer is often done through internet
using credit card

Electronic RequisitionsPurchase requisitions / Indents generated and
transmitted by computer, replacing paper forms
eMarketplaceA place to conduct e-commerce where sellers and
purchasers meet on the net. It is used for purchasing ,
auctioning etc.

EmbargoA government's total ban on trade with a specific
country

EnterpriseA complete business organisation from front line
employees to top management, all functions in between

ERPEnterprise Resource Planning refers to a system that
integrates various functions within an organisation. It
may be used for forecasting, Materials Management etc.
It's a computerised system now a days

Escalation ClauseA contract clause permitting a specified increase in
the price of goods or services in the event of certain
conditions. Such a clause also specific de-escalation

Established Market PriceA current price generated in the usual course of
business between buyers and sellers free to bargain and
which can be substantiated from an independent source

Exchange BarriersThe restrictions imposed on exchanging a country's
currency against those of other countries

Exchange RateThe price of a currency as it is being exchanged for
another

Exempt CommoditiesCommodities that are not subject to import duties or
can be transported exempt of regulation

ExpeditingContacting a supplier or carrier with the goal of
speeding up the delivery date of an inbound shipmen

Export licenseA permit from a host country government, enabling
organisations to take goods out of a country

Express Warranty
A specific assurance made by the seller concerning the
performance , quality, or nature of the goods or services
sold

For example, a job ad for a procurement role
might say "the applicant must have RFx
experience", which refers to all of the
processes collectively.

E-RFx is the same except it refers to
managing the complete RFx process via a
web-based solution.

e-sourcing

E-sourcing is the procurement practice of
finding new suppliers for products or services via
Internet technology.

Economies of scale

Economies of scale is the idea that when
a company increases in size, it can obtain higher
cost savings in areas such as:

production (lower cost per unit)

purchasing (buying power via larger volume
orders).

The disadvantages that can arise through a
company's expansion are simply called Dis-economies
of scale.

EDI

Electronic Data Interchange (EDI) refers
to the system protocols that companies use to
communicate information between each other.

For instance, some companies are fully
integrated to send/receive communications between
each other's ERP systems (eg: SAP & Ellipse), for
transactions such as Purchase Orders, Invoices,
Order Acknowledgments, and Change Orders.

For example, a Purchasing Officer for a mining
company creates a purchase order in the SAP system
for three hydraulic pumps. The order then
transmits through an online portal, where it is
converted into a computer language that can be
read by the supplier's Ellipse System.

The order then appears on the supplier's
Ellipse system, where it is automatically accepted
due to the part number and price being correct. An
order acknowledgment is automatically transmitted
back to the purchasing officer's SAP system,
confirming the order has been accepted.

elasticity of demand procurement

What does the term Elasticity of Demand mean? This
refers to the effect that a change in price of a
product of service has on the demand for that
product or service.

entire agreement clause

An Entire Agreement Clause can be placed in a
contract to make it clear that all agreed terms
between two parties are covered in the contract,
and that there are no additional agreements
(verbal or otherwise) outside of this contract.

epcm

You may have seen the term EPCM in job
advertisements, eg: "Procurement Specialist
required for Global EPCM company..." or
"our EPCM client needs experienced Purchasing
Officer..".

An EPCM is a company that is contracted
to handle the Engineering, Procurement, and
Construction Management of a project.

This differs from an EPC (Engineering,
Procurement, and Construction) company, in
that an EPC would have a contract solely
with the project owner, whereas an EPCM
would form multiple contracts with many suppliers
in the course of their management of the
project.

ERP systems

ERP stands for Enterprise Resource
Planning, and refers to the procurement management
software used in business to support its functions
such as Procurement, Payroll, Manufacturing,
Inventory, Importing, Sales etc.

Essential Purchasing Skills 1: ERP Are
you competent with an ERP (Enterprise Resource
Planning) system such as Pronto, Momentum Pro, SAP
etc? Every Purchasing role requires using one of
these programs.

2: SPREADSHEETS Can you use spreadsheets
(namely Excel)? They are vital in your Purchasing
role, and you will notice this as an 'essential
requirement' in most Purchasing job
advertisements. Most companies use spreadsheets
for analysis and reporting. Make sure you know
your way around a spreadsheet. and that you
understand more advanced functions such as Pivot
Tables and V-Lookups.

3: CONTRACT LAW A general understanding of
Contract Law is essential, because on a daily
basis you are entering into contracts with
Suppliers and Customers (whether you realize it or
not) and its important to know the principles.

ETA

What is the difference between ETD
(Estimated Time of Delivery) and ETA
(Estimated Time of Arrival)? They both sound like
they mean the same thing, but that's not the case.

If a supplier advises an ETD, this is
the date the goods will leave that
supplier's premises.

On the other hand, the ETA is the date
the goods will arrive at the destination,
or in the case of importing/exporting, it is the
date it will arrive at the destination's
port/airport.

It's important to distinguish between the two.

The following example shows the importance of
distinguishing ETD and ETA.

A Purchasing Officer places an order for fibre-optic
cable from a supplier in China. The supplier
advises an ETD of December 2nd. The
Purchasing Officer then advises the sales
department that the ETD on the cable is 2nd
December. The sales department advise the customer
that the cable will be delivered to their store on
the 2nd of December!!! On the 3rd of the December,
the customer phones up the sales department asking
where their cable is. The sales department ask the
Purchasing Officer where the cable is and the
Purchasing Officer explains that the goods have
only just left China on seafreight on December
2nd, and therefore won't arrive (ETA) until
January 5th.

As you can see, not understanding the
difference between ETD and ETA can cause
confusion.

ETD

What is the difference between ETD
(Estimated Time of Delivery) and ETA
(Estimated Time of Arrival)? They both sound like
they mean the same thing, but that's not the case.

If a supplier advises an ETD, this is
the date the goods will leave that
supplier's premises.

On the other hand, the ETA is the date
the goods will arrive at the destination,
or in the case of importing/exporting, it is the
date it will arrive at the destination's
port/airport.

It's important to distinguish between the two.

The following example shows the importance of
distinguishing ETD and ETA.

A Purchasing Officer places an order for fibre-optic
cable from a supplier in China. The supplier
advises an ETD of December 2nd. The
Purchasing Officer then advises the sales
department that the ETD on the cable is 2nd
December. The sales department advise the customer
that the cable will be delivered to their store on
the 2nd of December!!! On the 3rd of the December,
the customer phones up the sales department asking
where their cable is. The sales department ask the
Purchasing Officer where the cable is and the
Purchasing Officer explains that the goods have
only just left China on seafreight on December
2nd, and therefore won't arrive (ETA) until
January 5th.

As you can see, not understanding the
difference between ETD and ETA can cause
confusion.

EXW

Ex-Works (EXW) is an incoterm whereby
the seller makes the goods available for
collection at their premises, and it is the
buyer's cost and risk to have the goods loaded and
delivered.

A seller will often quote goods EXW, and
this makes it clear that the price they are
quoting doesn't include charges such as freight,
loading, insurance, clearance etc.

For example, a procurement officer sends an RFQ
to a pump supplier, who quotes the pump EXW.
The order is then placed and the supplier advises
the date when the goods will be ready for
collection. The buyer, at their own cost and risk,
organizes their own freight company to collect and
deliver the pump.

Expediting

The process of Expediting means to chase
up purchase orders to ensure the most timely
delivery possible.

Expediting is usually done by the Purchasing
Officer, but some larger companies employ
Expediting Officers purely to focus on this
process.

Here are some of tasks of an Expediting
Officer:

Running regular reports on overdue orders

Phoning/emailing suppliers to chase orders

Sending Expedite Requests to suppliers

Visiting suppliers' premises and inspecting
their production processes